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Buying for the Home Online - UK - December 2018

“Online retailing accounts for 12.4% of sales through household goods stores and 18.5% of all consumer spending on the home. Online sales of goods for the home have grown at a rapid rate, growing share of consumer spending, while sales through stores have been relatively stable over the same time period. This shift to shopping online is part of a wider pattern of changing shopping behaviour. Non-store retailing, including Amazon and other pureplay internet sellers, have shown the highest rate of growth in the past five years, prompting store-based retailers to raise their efforts to compete by improving their own web-based services.”
– Jane Westgarth, Senior Retail Analyst

This Report looks at the following areas:

  • Is online retailing responsible for the decline of conventional stores? 
  • How can specialists survive in a digital landscape?
  • What are consumer preferences when buying online for the home?

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Consumers spend £11.9 billion on homewares online
              • Figure 1: Online spending on goods for the home, 2013-23
            • Electrical goods account for 41% of spend
              • Figure 2: Online spending on goods for the home, by category, 2018 (est)
            • Garden is the least developed market segment
              • Household goods specialists increase online sales
                • Figure 3: Household goods retailers, percentage of sales made online, 2013-18
              • High levels of personal technology ownership
                • Stable housing market over 2014-18
                  • Rapid rise in private renting
                    • New tax regime for online sellers
                      • Companies and brands
                        • 50% of online spending for the home goes through the top four sellers
                          • Figure 4: Home online, key retailers, share of spending, 2018
                        • Online marketplaces offer breadth and depth
                          • Development of voice-controlled ordering
                            • Buying handyman services online
                              • John Lewis invests in smoother checkout processes
                                • Help with visualising furniture or electronics in your own home
                                  • Developments in search technology
                                    • IKEA embracing low carbon deliveries
                                      • The consumer
                                        • Households with children are a key target group
                                          • Figure 5: Homewares purchased online in the last year, summary, September 2018
                                        • Online shoppers for furniture and furnishings are younger and wealthier than average
                                          • Figure 6: Homewares purchased online in the last year, furniture and furnishings, September 2018
                                        • 33% bought soft furnishings online
                                          • Figure 7: Homewares purchased online in the last year, soft furnishings, September 2018
                                        • 45% bought homewares for the kitchen online
                                          • Figure 8: Homewares purchased online in the last year, kitchenware, household appliances, and laundry accessories, September 2018
                                        • Online garden shopping attracts an older demographic
                                          • Figure 9: Homewares purchased online in the last year, garden goods, September 2018
                                        • 28% bought DIY goods online
                                          • Figure 10: Homewares purchased online in the last year, DIY goods, September 2018
                                        • 90% are shopping online the same or more than last year
                                          • Figure 11: More or less shopping online for homewares, September 2018
                                        • Home delivery is the most-used option
                                          • Figure 12: Delivery options used for homewares purchased online, September 2018
                                        • People are not showing preference for retailers with physical stores
                                          • Figure 13: Types of retailers used for online shopping for the home, September 2018
                                        • Amazon stand out as the most-used internet-only retailer
                                          • Figure 14: Internet-only retailers used for homewares, September 2018
                                        • Argos (59%) is, by far, the most-used store-based retailer for goods for the home
                                          • Figure 15: Store-based retailers used for online shopping for homewares, September 2018
                                        • Delivery and returns rank alongside product range for online shoppers for the home
                                          • Figure 16: Factors influencing choice of retailers when shopping online for homewares, September 2018
                                        • Customer reviews, viewing products, and convenient shopping times matter most
                                          • Figure 17: Shopping behaviour when buying homewares online, September 2018
                                        • What we think
                                        • Issues and Insights

                                          • Is online retailing responsible for the decline of conventional stores?
                                            • The facts
                                              • The implications
                                                • How can specialists survive in a digital landscape?
                                                  • The facts
                                                    • The implications
                                                      • What are consumer preferences when buying online for the home?
                                                        • The facts
                                                          • The implications
                                                          • The Market – What You Need to Know

                                                            • Consumers spend £11.9 billion on homewares online
                                                              • Online shopping reaches 18.5% share of homewares
                                                                • Online retailing for the home to grow strongly
                                                                  • Electrical goods account for 41% of spend
                                                                    • Garden is the least developed market segment
                                                                      • Household goods specialists increase online sales
                                                                        • High levels of personal technology ownership
                                                                          • Stable housing market over 2014-18
                                                                            • Rapid rise in private renting
                                                                              • New tax regime for online sellers
                                                                              • Market Size and Forecast

                                                                                • Online shopping reaches 18.5% share of homewares
                                                                                  • Figure 18: Online spending on goods for the home, 2013-23
                                                                                  • Figure 19: Online spending on goods for the home, 2013-23
                                                                                  • Figure 20: Consumer spending on household goods, total and online, 2013-23
                                                                              • Market Segmentation

                                                                                • Electrical goods are the most-developed online market segment
                                                                                  • Figure 21: Online spending on household goods, mix by category, 2018 (est)
                                                                                • Complex market place with wide variation in online spend
                                                                                  • Figure 22: Online shopping for the home, by market segment, 2013-18 (estimates)
                                                                              • Channels of Distribution

                                                                                • 11.9% of sales through household goods specialists are online
                                                                                  • Figure 23: Household goods retailers, percentage of sales made online, 2013-18
                                                                                • Slowing growth of online sales through specialists
                                                                                  • Figure 24: Household goods retailers, total sales, and online sales, 2013-18
                                                                                • Difficult times for store-based retailers
                                                                                  • Forecast methodology
                                                                                  • Market Drivers

                                                                                    • 69% of households have a laptop computer
                                                                                      • Figure 25: Technology products have in household, June 2018
                                                                                    • 85% owns a smartphone
                                                                                      • Figure 26: Technology products personally owned, June 2018
                                                                                    • Stable housing market over 2014-18
                                                                                      • Figure 27: UK property transactions with value £40,000 or above, 2013-18
                                                                                    • More than half a million new households 2013-17
                                                                                      • Figure 28: Number of UK households, 2013-17
                                                                                    • 8.9 million people live in private rented property
                                                                                      • Figure 29: Population by household tenure, 2013 and 2018
                                                                                    • 2020 to see the imposition of an ‘Amazon’ tax
                                                                                    • Companies and Brands – What You Need to Know

                                                                                      • Four players account for half of spending
                                                                                        • Online marketplaces offer breadth and depth
                                                                                          • Development of voice-controlled ordering
                                                                                            • Buying handyman services online
                                                                                              • John Lewis invests in smoother checkout processes
                                                                                                • Help with visualising furniture or electronics in your own home
                                                                                                  • Developments in search technology
                                                                                                    • Marketplace platforms add levels of sophistication
                                                                                                      • IKEA embracing low carbon deliveries
                                                                                                      • Key Players

                                                                                                        • Four companies account for half of online spending for the home
                                                                                                          • Figure 30: Home online, key retailers, share of spending, 2018 est
                                                                                                        • Retailers with ‘marketplace’ services
                                                                                                          • Amazon
                                                                                                            • Figure 31: Amazon, UK turnover, 2013-17
                                                                                                          • eBay
                                                                                                            • Figure 32: eBay, UK turnover, 2013-17
                                                                                                          • Wayfair
                                                                                                            • Figure 33: Wayfair, international turnover, 2015-17
                                                                                                          • Houzz
                                                                                                            • Other homewares marketplace sellers
                                                                                                              • Online-only retailers
                                                                                                                • AO.com
                                                                                                                  • Figure 34: AO.com, turnover and operating profit, 2013-17
                                                                                                                • Shop Direct
                                                                                                                  • Figure 35: Shop Direct Group, turnover and operating profit, 2013-17
                                                                                                                • Other online pureplay homewares retailers
                                                                                                                  • Garden
                                                                                                                    • Furniture
                                                                                                                      • Multi-channel retailers with homewares
                                                                                                                        • Argos
                                                                                                                            • Figure 36: Argos, turnover and operating profit, 2013-17
                                                                                                                          • IKEA
                                                                                                                            • Figure 37: IKEA, turnover and operating profit, 2013-17
                                                                                                                          • Dunelm
                                                                                                                            • Figure 38: Dunelm Mill, turnover and operating profit, 2013-17
                                                                                                                          • B&Q
                                                                                                                            • Figure 39: B&Q, turnover, UK and Ireland, 2013-17
                                                                                                                          • Currys (Dixons Carphone)
                                                                                                                            • Figure 40: Dixons Carphone, UK turnover, 2013-17
                                                                                                                          • John Lewis
                                                                                                                            • Figure 41: John Lewis plc, turnover and operating profit, 2013-17
                                                                                                                          • Next
                                                                                                                            • Figure 42: Next Online, UK turnover, 2013-17
                                                                                                                          • DFS
                                                                                                                            • Figure 43: DFS, turnover, 2013-17
                                                                                                                        • Competitive Strategies

                                                                                                                          • New store openings help to boost online activity
                                                                                                                            • Rapid progress for opening Argos in Sainsbury’s
                                                                                                                              • Figure 44: Argos, outlet numbers 2017 and 2018
                                                                                                                            • Implications of the proposed merger of Sainsbury’s and Asda
                                                                                                                              • Figure 45: Argos inside Sainsbury’s, 2018
                                                                                                                          • Launch Activity and Innovation

                                                                                                                            • Amazon and Argos develop voice-controlled ordering
                                                                                                                              • John Lewis invests in smoother checkout processes
                                                                                                                                • Help with visualising furniture or electronic in your own home
                                                                                                                                  • Developments in search technology
                                                                                                                                    • Figure 46: Wayfair, example of roomset, 2018
                                                                                                                                  • Market place platforms add levels of sophistication
                                                                                                                                    • IKEA embracing low carbon deliveries
                                                                                                                                      • Figure 47: Electric delivery bike, 2018
                                                                                                                                    • Buying handyman services online
                                                                                                                                    • Marketing Activity

                                                                                                                                      • Black Friday attracted online shoppers for the home in 2017
                                                                                                                                        • eBay promotes variety and invests in targeted campaigns
                                                                                                                                          • Argos advertising emphasises delivery or collection options
                                                                                                                                          • The Consumer – What You Need to Know

                                                                                                                                            • Households with children are a key target group
                                                                                                                                              • 32% bought any furniture or furnishings online
                                                                                                                                                • Millennials are the core online shopper group for textiles
                                                                                                                                                  • 45% bought homewares for the kitchen online
                                                                                                                                                    • Online shopping for garden goods has an older demographic
                                                                                                                                                      • Owner-occupiers buy DIY goods online
                                                                                                                                                        • 90% are shopping online the same or more than last year
                                                                                                                                                          • Home delivery is the most-used option
                                                                                                                                                            • People are not showing a preference for retailers with physical stores
                                                                                                                                                              • Amazon (84%) by far the most-used internet-only retailer
                                                                                                                                                                • Argos (59%) is, by far, the most-used store-based retailer for goods for the home
                                                                                                                                                                  • Younger Millennials buying homewares online from IKEA
                                                                                                                                                                    • Delivery and returns rank alongside product range for online shoppers for the home
                                                                                                                                                                      • Customer reviews, viewing products, and convenient shopping times matter most
                                                                                                                                                                        • Showrooming behaviour
                                                                                                                                                                        • Homewares Purchased Online

                                                                                                                                                                          • 72% of respondents bought homewares online in the last year
                                                                                                                                                                            • Figure 48: Homewares purchased online in the last year, summary, September 2018
                                                                                                                                                                          • How household tenure influences online shopping for the home
                                                                                                                                                                            • Figure 49: Homewares purchased online in the last year, any, by household tenure, September 2018
                                                                                                                                                                        • Homewares Purchased Online by Sector

                                                                                                                                                                          • 32% bought any furniture or furnishings online
                                                                                                                                                                            • Figure 50: Homewares purchased online in the last year, furniture and furnishings, September 2018
                                                                                                                                                                          • 33% bought soft furnishings online
                                                                                                                                                                            • Figure 51: Homewares purchased online in the last year, soft furnishings, September 2018
                                                                                                                                                                          • 45% bought homewares for the kitchen online
                                                                                                                                                                            • Figure 52: Homewares purchased online in the last year, kitchenware, household appliances, and laundry accessories, September 2018
                                                                                                                                                                          • 27% bought garden goods online
                                                                                                                                                                            • Figure 53: Homewares purchased online in the last year, garden goods, September 2018
                                                                                                                                                                          • 28% bought DIY goods online
                                                                                                                                                                            • Figure 54: Homewares purchased online in the last year, DIY goods, September 2018
                                                                                                                                                                        • More or Less Online Shopping for Homewares?

                                                                                                                                                                          • 90% are shopping online the same or more than last year
                                                                                                                                                                            • Figure 55: More or less shopping online for homewares, September 2018
                                                                                                                                                                            • Figure 56: More or less shopping online for homewares, by type of homewares purchased, September 2018
                                                                                                                                                                        • Delivery Options Used for Homewares Purchased Online

                                                                                                                                                                          • Delivery to the home is most popular
                                                                                                                                                                            • Figure 57: Delivery options used for homewares purchased online, September 2018
                                                                                                                                                                          • People use a variety of delivery options
                                                                                                                                                                            • Figure 58: Delivery options used for homewares purchased online, repertoire, September 2018
                                                                                                                                                                        • Types of Retailers Used for Online Shopping for the Home

                                                                                                                                                                          • 19% only bought online from retailers with physical stores
                                                                                                                                                                            • Figure 59: Types of retailers used for online shopping for the home, September 2018
                                                                                                                                                                        • Internet-only Retailers Used for Homewares

                                                                                                                                                                          • Amazon by far the most-used internet-only retailer
                                                                                                                                                                            • Figure 60: Internet-only retailers used for homewares, September 2018
                                                                                                                                                                          • 38% used just one internet-only retailer
                                                                                                                                                                            • Figure 61: Internet-only retailers used for homewares, repertoire, September 2018
                                                                                                                                                                            • Figure 62: Internet-only retailers used for homewares, repertoire, by selected online-only retailers used, September 2018
                                                                                                                                                                        • Store-based Retailers Used for Online Shopping for Homewares

                                                                                                                                                                          • Argos is the most popular store-based retailer for online shoppers for the home
                                                                                                                                                                            • Argos appeals to the lower socio-economic groups
                                                                                                                                                                              • Supermarkets are popular with Millennials
                                                                                                                                                                                • Younger Millennials buying homewares online from IKEA
                                                                                                                                                                                  • Figure 63: Store-based retailers used for online shopping for homewares, September 2018
                                                                                                                                                                                • 38% of those shopping online with store-based retailers used three or more retailers
                                                                                                                                                                                  • Figure 64: Store-based retailers used for online shopping for homewares, repertoire, September 2018
                                                                                                                                                                              • Factors Influencing Choice of Retailers When Shopping Online for Homewares

                                                                                                                                                                                • After-sales service has huge influence on online shopping for the home
                                                                                                                                                                                  • Figure 65: Factors influencing choice of retailers when shopping online for homewares, September 2018
                                                                                                                                                                                • Free delivery has strong appeal to shoppers age 45+
                                                                                                                                                                                • Shopping Behaviour When Buying Homewares Online

                                                                                                                                                                                  • Customer reviews, viewing products, and convenient shopping times matter most
                                                                                                                                                                                    • Figure 66: Shopping behaviour when buying homewares online, September 2018
                                                                                                                                                                                  • Reviews add a layer of assurance
                                                                                                                                                                                    • Convenient shopping times influence 45%
                                                                                                                                                                                      • Familiarity with the retailer
                                                                                                                                                                                        • Visiting shops then buying online
                                                                                                                                                                                          • One in five look for inspiration on websites such as Pinterest
                                                                                                                                                                                            • Cash-back websites are used by 15%
                                                                                                                                                                                            • Appendix – Data Sources, Abbreviations, and Supporting Information

                                                                                                                                                                                                • Abbreviations
                                                                                                                                                                                                  • Consumer research methodology
                                                                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                                                                    • Forecast methodology
                                                                                                                                                                                                        • Figure 67: Total spending on goods for the home, 2013-23
                                                                                                                                                                                                        • Figure 68: In-store spending on goods for the home, 2013-23
                                                                                                                                                                                                        • Figure 69: In-store spending on goods for the home, 2013-23

                                                                                                                                                                                                    Buying for the Home Online - UK - December 2018

                                                                                                                                                                                                    US $2,552.20 (Excl.Tax)